House prices are set to drop by up to 5.1% across the UK this summer as the economic uncertainty created by the Coronavirus crisis drives buyers and vendors to agree lower prices.
Leading price comparison site Reallymoving says its lockdown conveyancing quotes data from 8,000 house moves between March and May this year reveals the significant agreed price decline, which is currently feeding through the system.
This will mean the average property price will fall from £308,280 in June to £296,485 in August when these deals complete. It is also predicted that August will see a hefty 1.4% reduction in house prices in August year-on-year
Reallymoving says it sees price movements earliest within the industry because the company collects data at the beginning of the property purchase process, when buyers agree a deal and seek conveyancing quotes, and is therefore an early-warning system for price changes.
“For sellers now facing a period of great uncertainty and a scarcity of buyers, doing a deal at a reduced price of 3-4% could look considerably more appealing than sitting tight and waiting to see what happens over the next few months,” says CEO Rob Houghton (left).
“Transaction volumes are at half their normal levels and the economy is currently propped up by the Government through the furlough scheme alongside mortgage payment holidays, so although the market is open once again, its underlying health has not yet been tested.
“Levels of unemployment and confidence in the jobs market will be key factors in determining whether the housing market recovers in the autumn with a levelling out of prices or continues in a downward trajectory.”